3 Things – Embedded Auto, CEO Concerns & Digital Platforms – 06/17/2022

Hello Friends!  It was a big week of economic news with the growing concerns of inflation and fears of recession dominating conversation.  As always the insurance industry marches forward and we follow along.  This week we are following embedded auto insurance, insurance CEOs concerned about inflation and the launch of digital platforms:


Embedded/Digital Auto Insurance Opportunity

There was a lot of auto insurance news to follow this week.  Highlighted by the Polly (formerly DealerPolicy) acquisition of Driven Data.  Data and embedded auto insurance go hand-in-hand and this appears to be the line of business that is most digitally enabled.  Is it a coincidence that Progressive, a pioneer in digitally distributed auto insurance, now leads the US market passing State Farm this week?  Likely not, as digital natives come of age and become the dominate demographic of auto purchasers and drivers.  The opportunity to create embedded and digitally distributed auto insurance continues to grow.


Inflation Continues Concern

As mentioned this week featured big macro-economic news that has ramifications for the insurance industry.  We already know that inflation is top of mind for everyone and several big insurer CEOs gathered and discussed this week at the S&P ratings conference.  We have been living in this low interest rate environment for quite some time and that has created the frothy market for insurtechs to go public and grow with reinsurers backing them but the Fed raised interest rates .75% this week and signaled more will be coming.  Rates will continue to go higher and the risk of recession will continue to grow spelling trouble for those that are not strong enough fundamentally.


AXA and HUB Launch Digital Platforms

Traditional insurers continue to develop digital capabilities.  AXA announced a new digital platform that leverages data from drones, satellites and other sensors to provide risk management and insights for small commercial insureds.  Meanwhile broker HUB, who has been making a series of digital maneuvers such as acquiring Insureon earlier this year, launches a personal lines digital placement platform.  If given time, these incumbent organizations have the resources to continue growth into digital channels and acquire insurtech assets which have dropped in value.

Thank you for following us, we appreciate your feedback and continued support.  Stay tuned for more info to come.  Until next time… stay safe, stay productive!